Nomura filed a claim at the High Court in London on Sept.
12, court documents show. Officials for Nomura declined to
comment. Officials at the region of Sicily didn’t have an
immediate comment.

Sicily, Italy’s poorest region, faces increasing losses on
about 860 million euros ($1.1 billion) of derivatives with banks
led by Bank of America Corp., Deutsche Bank AG and Nomura.
Future losses will wipe out earlier gains, Italy’s state auditor
said in a June 29 report. The regulator urged Sicily to “seek
protection” against losses on the contracts.

A liquidity shortage forced the Italian government to
disburse 400 million euros of funds to the region in July after
Prime Minister Mario Monti expressed “serious concerns about
the possibility Sicily could default.” Sicily’s 5.3 billion
euros of debt increased last year as it hired staff, and mark-to-market losses on swaps may add to future obligations.

Sicily last year began talks with its derivatives banks to
“simplify the contractual clauses and in an effort to maximize
savings” and may restructure the contracts, the region’s
finance department said on Feb. 19. The local government said
then that it expected talks to be completed by the end of the
year, though it didn’t give details about the contracts.

The region paid about 41.1 million euros on rate swaps in
2011, eroding the local government’s gains since 2005 to about
15 million euros, state auditor data show. The so-called mark-to-market on the swaps was about 359 million euros in the banks’
favor as of April 30, the national accountant said.

Sicily’s biggest derivatives counterparty is Nomura,
followed by Bank of America and Deutsche Bank, according to the
region’s filings published on its website.